Studies on interactions of measles virus and continuous lymphoblastoid cell lines revealed that low multiplicities of infection consistently establish persistently infected cell lines. Seventy two clones of virus were isolated from four persistent cell lines and 85% were found to be ts mutants. Genetic complementation analysis revealed mutants in all four known complementation groups, and two new types of mutants were found that complement the reference mutants. Thus lymphoid cells are capable of becoming persistently infected and producing a wide diversity of viral mutants. Mechanisms of resistance to persistent viral infection were studied in the nude mouse. HeLa cells or BHK cells form tumors in nude mice. The same cells persistently infected with six RNA viruses failed to do so. In vitro experiments revealed a non-B non-T cell in the spleens of nude mice capable of recognizing and lysing virus persistently infected cell lines. The cell responsible was identified as an NK cell and its surface markers were established to be Ly 5 plus, Qa 5 plus, AsGMl plus and 40% were Thy 1.2 plus. Interferon is known to augment NK activity. The mode of action of interferon was established by showing that upon depletion of NK cells with anti-Ly 5 plus C interferon was capable of causing the differentiation of a Qa 5 plus, Ly 5 minus precursor into a Qa 5 plus, Ly 5 plus NK cell. Preliminary evidence indicates the treatment of mice with anti-IF serum blocks the ability of the animals to reject virus infected tumor cells, and confirms the importance of the IF-NK system in vivo in resistance to virus infected tumor cells.